$3.$ Locking in fuel prices via long$-$term contracts

Signing long$-$term contracts to purchase diesel and jet fuel at a fixed price is a third option that would stabilize expenses for the next two years. The decision would provide cost stability for FedEx and protect it from any fluctuations in fuel prices. A stable cost structure enables more consistent shipping prices, which appeal to business clients who value logistics cost predictability. Budgeting and financial planning would also be simpler with fixed fuel prices.

However, this strategy also has certain hazards. If gas prices continue to decline, FedEx may end up paying higher$-$than$-$market prices, which would reduce its cost advantage. Funding for fuel expenses could also be used to other strategic initiatives,